What to do with Wally? Wally was an awkward and shy child who belonged to the church kids club. It was time to hand out roles for the Christmas play, but what role should the teacher give Wally? She decided on the inn-keeper. It was an important role, but required Wally only to shake his head and say one line “Sorry, we’ve no room.” Wally grinned from ear to ear when he learned of his important role and he couldn’t wait for the big night.
It arrived soon enough, and the play was proceeding according to plan. Mary and Joseph had traveled to Bethlehem and come to the door of the inn. Joseph knocked on the door and it opened to Wally. “Please sir, do you have a room we could take?” asked Joseph. Wally shook his head and replied. “I’m sorry, we’ve no room”.
Now the boy playing Joseph was a particularly confident child, and while the script called for he and Mary to turn away at this point, Joseph decided to exercise some dramatic license. “But sir” he said to the innkeeper, “My wife is about to have her baby and we need somewhere to stay. Couldn’t you find us a room.” Wally’s face went white – this was not planned for! – and he paused for a moment before repeating his line. “I’m sorry, we’ve no room.”
“But sir” replied Joseph, “We’ve traveled such a long way and we’ve nowhere else to go and my wife is very tired. Surely you can find us somewhere.” Wally bowed his head, shook it sadly and said, “I’m sorry, we’ve no room.” Forlornly Joseph and Mary started walking away. Wally, now fully into his role, felt shamed and saddened. A tear trickled down his cheek. Then his voice was heard calling out. “Wait! Please come back. You can have my room.”
It may not have been according to script, but at that moment Wally gave perfect expression to the Christmas story.
Source: widely repeated story of unknown origins